Investors have pulled over $3 billion from the largest gold ETF so far this year and outflows are accelerating on the precious metal’s decline below $1,600 an ounce and the Federal Reserve’s outlook on quantitative easing.
Since the end of 2012, SPDR Gold Shares (NYSEArca: GLD) has experienced net redemptions of $3.1 billion, according to data from IndexUniverse.
GLD on Wednesday saw its largest one-day outflow in 18 months following the release of the minutes from the latest Fed meeting. Some Fed officials voiced concern over the costs and risks that could arise from further easing. [Could Gold ETF Outflows Drive ‘Vicious Circle of Selling?’]
“U.S. ETF investors’ five-month love affair with gold came to an abrupt end in January as they pulled $1 billion from the world’s largest bullion-backed ETF to put into other commodity funds,” Reuters reports.
“The exodus of money from the SPDR Gold Trust was driven initially by encouraging economic trends that boosted appetite for riskier commodities such as oil and grains. The retreat has continued into February despite uncertainties over global growth,” according to the report.
GLD is down about 9% the past three months. The ETF holds 1,290 metric tons of gold, or total assets of about $65.4 billion.
Other bullion-backed ETFs include iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL).
“It looks like people started the year pulling money out of gold to go into other commodity funds, particularly the broader multi-commodity type funds, although that could change as the market evolves,” said Matthew Lemieux, a Lipper analyst, in the Reuters article.
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD.